Groww Hits 52-Week High, But BofA Sees 13% More Upside: Here is the ‘Secret’ Engine

The Billionbrains Garage Ventures shares surged over 7% on April 15, 2026, hitting a fresh 52-week high of Rs 212.90 on the bourses, the same day the brokerage initiated coverage with a ‘Buy’ rating and set a price target of Rs 235, leaving room for 13% upside from current levels.

Bank of America Securities builds its case around Groww being a direct play on India’s underpenetrated retail investing opportunity, with revenue expected to grow at about 30% compound annual growth rate between FY26 and FY28, alongside margin expansion driven by a fixed-cost technology-led model.

Bank of America Securities on Groww: India’s retail investment wave has barely begun

The single most important structural argument in Bank of America Securities‘ note is that India’s retail investing story is genuinely early-stage. The brokerage points out that active investors stand at roughly 6.9 crore, which amounts to approximately 5% of the total population, a figure that compares poorly with the United States where active broking account penetration sits at 62%. Meanwhile, only about 12% of total household savings in India are parked in mutual funds, shares, and debentures, against around 44% sitting in deposits as of FY25.

The high and upper-middle income household base in India, which the brokerage identifies as the primary pool of potential new investors, is expected to expand to 19.7 crore households by 2030 from 6.9 crore in 2018. Bank of America Securities estimates the active investor base can grow to 10 crore by 2030, and it believes Groww is better positioned than peers to capture a disproportionate share of those new entrants.

“India’s retail investment industry is still at an early stage with long runway for growth driven by growing high and upper middle income household base, financialization of household savings, lower penetration of active investors and relatively higher returns in capital markets, aided by favorable taxation,” Bank of America Securities says.

Bank of America Securities on Groww: The platform that wins first-time investors

Groww built its early reputation on making investing accessible to first-time users, and Bank of America Securities argues that advantage has compounded into a strong acquisition engine. The platform has around 1.4 crore active customers as of the most recently reported period, giving it a leading position among brokers in India. More than 80% of its customers are acquired organically, a figure that has stayed stable across FY23 through the first quarter of FY26, which the brokerage reads as evidence of strong brand recall and word-of-mouth referrals rather than paid acquisition.

Customer retention after three years stands at 77.7%, and more than 50% of active customers have two or more products on the platform. The brokerage notes that a large share of users begin their journey through mutual funds before eventually migrating to higher-margin products like stocks, derivatives, and margin trading facility. Groww’s mutual fund systematic investment plan market share has now risen to about 13% on a FY26 year-to-date basis.

“Groww dominates the young, new to investing customer segment with its frictionless onboarding and easy to use app. Its core competency lies in acquiring customers via mutual fund or stock investment route and progressively cross-selling more mature financial products such as derivatives, commodities, loans, wealth management,” Bank of America Securities notes.

Bank of America Securities on Groww: Fixed-cost model that gets more profitable as it scales

One of the more compelling parts of the Bank of America Securities analysis is the margin expansion story. Groww’s cost structure is dominated by technology and transaction costs, marketing expenses, and employee costs, all of which are largely fixed or semi-fixed in nature. As revenue grows, these costs do not increase proportionately, which drives operating leverage.

The brokerage points out that marketing costs as a percentage of revenue declined to 12% in FY25 from 21% in FY23, and it expects this ratio to decline further as organic customer acquisition continues to dominate. Employee costs are also low relative to peers because Groww does not rely on a large relationship manager-led model, with around 1,400 employees supporting its platform.

Bank of America Securities expects EBITDA margin to expand to 67% by FY28 from about 59% in FY25, while profit after tax margin is expected to rise to 52% by FY28 from around 42% in FY25.

“Groww operates as a largely fixed cost model, of which technology, marketing cost and employee expense being the key cost components. This enables the company to sustain margin expansion led by operating leverage benefits and average revenue per user expansion,” Bank of America Securities adds.

Bank of America Securities on Groww: Derivatives regulation hurt, but the worst is behind

The report acknowledges that regulatory changes in the futures and options segment had a visible impact on industry volumes and near-term revenues. The Securities and Exchange Board of India implemented several measures between late 2024 and early 2025, which led to a sharp decline in derivatives activity.

According to them, “With multiple futures and options regulatory changes already implemented, we see reduced incremental risk. Scale-up in wealth management, asset management company, etc. could help cushion earnings to some extent.” Bank of America Securities notes that derivatives trading volumes fell almost 80% from peak levels, and the first half of FY26 saw about a 13% impact on revenue due to regulatory changes. However, the brokerage argues that the impact is now largely absorbed, with signs of stabilisation emerging.

For Groww, active derivatives traders declined by about 27% from the peak in Q1FY25 to Q1FY26, while average daily premium turnover has continued to grow, indicating improving user quality and engagement.

Bank of America Securities on Groww: Wealth management could be the next growth driver

Groww’s entry into wealth management through the acquisition of Fisdom marks the beginning of a new growth segment, according to Bank of America Securities. The report notes that Fisdom brings around 0.37 million customers and assets under management of about US$ 0.37 billion as of FY25, and provides Groww with a base to build its wealth platform.

Groww’s existing platform already has around 2.7 lakh affluent customers with an average assets under management per customer of about Rs 32 lakh, creating a ready base for cross-selling higher-value products.

The brokerage expects wealth management, along with mutual funds and asset management, to contribute meaningfully over time, with wealth likely accounting for about 7% of revenue by FY28.

“We see scope for re-rating as Groww drives further margin expansion and establishes a credible presence in wealth management,” Bank of America Securities adds.

Conclusion

Bank of America Securities’ note initiating coverage on Groww lays out a multi-layered growth case built on expanding retail participation, strong customer acquisition, improving monetisation and operating leverage. While the stock has already moved following the initiation, the brokerage maintains that the longer-term earnings trajectory remains intact.

Disclaimer: This report is based on a specific brokerage initiation and contains price objectives and investment ratings that reflect the views of the authoring analysts. These projections are for informational purposes and do not constitute an offer, solicitation, or a recommendation to buy or sell any security.

Individual financial circumstances vary; readers are encouraged to consult with a SEBI-registered investment advisor before making any capital market decisions. Please be aware that equity investments carry inherent market risks, and past performance or brokerage targets are not a guarantee of future returns.

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